The Budget 2016-17 is noteworthy for its little initiatives to boost jobs in the system, especially in the formal sector.
First, it has said that that the Government will pay the Employee Pension Scheme contribution of 8.33 per cent for all new employees enrolling in EPFO for the first three years of their employment. This is intended to spur employers recruit jobless persons, and also to bring into the system the informal employees. In order to channelise this intervention towards the target group of semi-skilled and unskilled workers, the scheme will be applicable to those with salary up to Rs.15,000 per month. And, the Budget has made a provision of Rs. 1,000 crore for this scheme.
Also, the Budget has broadened and liberalised the scope of the employment generation incentive available under Section 80JJAA of the Income-Tax Act. The deduction will be available not only to assesses deriving income from manufacture of goods in a factory but to all those who are subject to statutory audit under the Act.
A deduction of 30% of the emoluments paid to such employees can be claimed for three years. The minimum number of days for which they should be employed during the year is also reduced from 300 to 240 days. No deduction will, however, be admissible in respect to employees whose monthly emoluments exceed Rs. 25,000. Also, no deduction will be admissible in respect of employees for whom the Government is paying the entire EPS contribution. Significantly, the Budget has also focused on the retail trade, which is considered the largest service sector employer in the country.
“Many more jobs can be created in this sector, provided the regulations are simplified. If Shopping Malls are kept open all seven days of the week, why not the small and medium shops?'' the Finance Minister said in his Budget speech. These shops should be allowed to remain open on all seven days of the week on a voluntary basis, he added.
Nevertheless, he said the interest of the workers in terms of mandatory weekly holiday, number of working hours per day, etc. would have to be protected. The Government has now decided to circulate a Model Shops and Establishments Bill which could be adopted by the State Governments on a voluntary basis.
All these are significant small steps. These could, have a giant implications for job creation endeavour.